Thursday, April 27, 2006
Oh, somewhere in this favoured land the sun is shining bright,
The band is playing somewhere, and somewhere hearts are light;
And somewhere men are laughing, and somewhere children shout,
But there is no joy in Mudville—mighty Casey has struck out.
As Harper is discovering, the problem with being kissy-kissy with the Bush administration is that when you make a deal, nobody likes it. Nobody believes you have gone all out to get the best deal possible for Canada; in fact, they suspect you sold Canada down the river.
What is being said about the softwood lumber deal today isn't very pretty:
Shares of Canadian lumber companies dropped Thursday ahead of Mr. Harper's news, as a slew of analysts derided the tentative deal.
First, here's how much the shares dropped:
Shares of Canadian forestry companies dropped in Toronto on Thursday, with International Forest Products Ltd. shares dropping 3.7 per cent to $7.80, Tembec Inc. shedding 9.52 per cent to $1.90, Canfor Corp. stock shedding 2.6 per cent to $14.36, and West Fraser Timber Co. Ltd. losing 1.27 per cent to $42.70.And here's what the "slew of analysts" said:
"The deal is awful. It basically marginalizes the Canadian industry over the next seven years," Richard Kelertas, an analyst at Desjardins Securities, said in an interview. "Even if the Americans make some modifications to this, it is still a trap for the Canadians. The trap is that there is no language to exit, so they will be trapped in this bad deal for seven years." . . . Mr. Kelertas, the Desjardins Securities analyst, said that the original deal flew in the face of the North American Free Trade Agreement and World Trade Organization regulations, which state that cross-border deals are illegal. "The danger here is that you set a very dangerous precedent by saying that NAFTA is no good and can be argued by the Americans that it is unconstitutional." Mr. Kelertas lambasted Mr. Harper for agreeing to a deal that is bad for Canada "just to get a nice photo-op" with U.S. President George Bush. "George Bush apparently told Canadian and U.S. officials that if a deal is not done by midnight Thursday, the NAFTA appeal deadline, they don't want to spend any more time on this," he said. "We are talking about the lifeblood of thousands of communities across Canada." . . . The Thursday midnight deadline has been artificially created by the Bush administration, who are trying create a sense of urgency in order for Mr. Harper's government to accept a "shitty" deal, Mr. Kelertas said. If an agreement similar to the one on the table does go through, he added, shareholders of Canadian forestry and paper companies could sue the Canadian federal government for financially crippling them.In the blogosphere, Ross at Gazetteer has a number of posts up about this deal and its impact on British Columbia, in particular visualizing Harper waving a newspaper "Peace in our Time".
BMO Nesbitt Burns analyst Stephen Atkinson said the recouped duty payments are not a "windfall," but rather money that Canadian companies were giving their rivals. "Why would you give 22 per cent to your competition?" he said. "This money belongs to the companies and their shareholders, and the Canadian government is giving it away."
The framework deal negotiated Wednesday is "negative for many of the Canadian producers" said Robert Duncan, an analyst with MGI Securities.
"I didn't talk to anyone who was happy with it," another analyst, who did not want to be named, said of his discussions with lumber executives.
Over at Galloping Beaver, Dana writes:
. . . This is almost exactly the same deal that Emerson reportedly scuttled during the election campaign. One analyst referred to it as the same pig just with lipstick and a nice dress . . . It undercuts NAFTA, rewards US thuggery with a billion point three dollars from Canadian producers, limits access to US markets, has no exit clause...jaysus wept...it's just a dreadful outcome. If all you were going to do was drop to your knees and pucker Stephen you could have at least waited until the BBQ at George's ranch in Texas.Scott Tribe over at Progressive Bloggers writes:
. . . Harper has arm-twisted the provinces and producers to accept this sham of a deal. The US gets a 1 billion $ reward for illegally harrassing our lumber producers..we're not allowed more then 34% of the US market.. and this is a victory for Canada according to Harper? And we're locked into this deal for 7 years? The NDP's trade critic has reminded everyone on CTV that the Conservatives had promised to bring international treaties to the H of C for debate and votes. If thats the case, this deal should be voted down.And BigCityLib notices an "entitled to my entitlements" moment:
In trying to explain where $1,000,000,000 stolen from Canada and redistributed to the American lumber lobby went, Ambassador Michael Wilson said that "A Negotiation is a Negotiation." Can anyone explain what that means?
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